When you buy something, you’re usually on your own if the item is stolen or damaged. Most products don’t come with insurance, and when coverage is available, it typically comes at extra cost. But if you pay with your credit card, there’s a good chance you’re covered through the card’s complimentary purchase protection.
Here’s a look at how purchase protection programs work.
What is purchase protection?
Sometimes called damage protection, purchase protection insures goods against theft or accidental damage for a limited time. Depending the credit card, the coverage amount and the duration of the protection may differ.
Note that purchase protection is different from price protection and extended warranty coverage, other credit card benefits you might be eligible for. While extended warranty coverage offers more comprehensive damage protection, purchase protection gives you more protection in case of theft.
How to use purchase protection
To take advantage of this benefit, first review your card’s benefit statement to see whether you are eligible for reimbursement if a purchase is damaged, stolen or lost.
Keep in mind that if you have a primary insurance policy covering the item, you must file a claim there before approaching your credit card issuer to use purchase protection.
For most claims, you’ll typically need to submit:
- A copy of your credit card statement with the purchase.
- An itemized receipt from the retailer showing the purchase.
- A police report (for theft).
- A copy of the claim settlement from your primary insurance company, if applicable.
- A copy of your primary insurance declaration page, if applicable.
- Any other documentation needed to substantiate your claim.
Networks’ purchase protection, compared
|Source||Guide to Visa Signature benefits via CapitalOne||MasterCard||American Express||Discover (login required)|
|Duration||90 days||120 days (90 days for NY residents)||90 days||90 days|
|Coverage||$500 per claim, $50,000 per cardholder||$1,000 per claim, $50,000 per cardholder||$1,000 per claim, $50,000 per year†||$500 per claim, $50,000 per year|
|What's covered||Theft, damage||Theft, damage||Theft, damage‡||Theft, damage|
|Excluded items||See benefits guide||See benefits guide||See terms and conditions||See benefits guide (login required)|
|Gift coverage||Gifts are covered as long as they were purchased using an eligible card||Gifts are covered as long as they were purchased using an eligible card||Gifts are covered as long as they were purchased using an eligible card||Gifts are covered as long as they were purchased using an eligible card|
|Cards covered||Eligible Visa Signature cards||Eligible World and World Elite MasterCard cards||All American Express cards||All Discover cards|
|Registration||Purchases are automatically eligible||Purchases are automatically eligible||Purchases are automatically eligible||Purchases are automatically eligible|
|Additional restrictions||Coverage is secondary||Coverage is secondary||Coverage is secondary||Coverage is secondary|
*Benefits may vary by issuer. Check your benefits guide for complete details.
†$10,000 per claim, $50,000 per year for the Premier Rewards Gold Card from American Express, The Platinum Card® from American Express and Delta Reserve Credit Card cardholders
‡American Express covers lost purchases for The Platinum Card® from American Express and Delta Reserve Credit Card cardholders
Top cards for purchase protection
Blue Cash Preferred® Card from American Express
The ultimate shopping card, the Blue Cash Preferred® Card from American Express offers 6% cash back at U.S. supermarkets, on up to $6,000 in purchases a year (then 1%) and unlimited 3% cash back at gas stations and department stores. There are no rotating categories and there’s no need to search for special deals to get bonus cash back. What’s more, purchase protection is available for all cardholders, not just those who meet certain qualifications.
The Blue Cash Preferred® Card from American Express comes with an annual fee of $95, but it’s well worth it if you use the card often; you need to spend just $31 a week at supermarkets to cover the fee. The card also offers a sign-up bonus: $150 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months. Terms Apply. The downside is that American Express isn’t as widely accepted as Visa and MasterCard.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card isn’t just a stellar travel card, offering 2X points on travel and restaurant purchases. It also offers great shopping opportunities through the Chase Ultimate Rewards Mall, where you can earn up to 10 extra Ultimate Rewards points at a wide selection of online retailers. You can use those points to book travel on the Ultimate Rewards travel platform, where you’ll get a 20% discount on reservations.
The card also comes with a great sign-up bonus: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®.
The downside is that purchase protection doesn’t come automatically with the Chase Sapphire Preferred® Card. You have to qualify for the Visa Signature program, and Visa isn’t clear on the requirements. It also comes with an $0 for the first year, then $95 after that.
Discover it® - Cashback Match™
The Discover it® - Cashback Match™ is a Nerd favorite because it offers 5% cash back on up to $1,500 in combined purchases in categories that rotate every quarter and 1% cash back on everything else. Here’s the current bonus calendar:
|DISCOVER BONUS CATEGORIES FOR 2017|
|Q1 (Jan. 1 – March 31)||Gas stations, ground transportation and wholesale clubs|
|Q2 (April 1 – June 30)||Home improvement stores and wholesale clubs|
|Q3 (July 1 – Sept. 30)||Restaurants|
|Q4 (Oct. 1 – Dec. 31)||Amazon.com and more (details to be announced)|
The Discover it® - Cashback Match™ has a $0 annual fee, but doesn’t come with a sign-up bonus. Plus, Like American Express, Discover isn’t as widely accepted as Visa and MasterCard. However, your purchase protection benefit comes automatically with the card, no qualifications required.
The bottom line
Purchase protection offers short-term insurance for your everyday purchases, in case the items are stolen or damaged. However, the damage coverage comes with several exclusions, so you may want to see if your card also offers extended warranty coverage.
Last updated January 1, 2016.
Image via iStock.